838.51/3943½
Memorandum by the Chief of the Division of the American Republics (Duggan) to the Under Secretary of State (Welles)
Mr. Welles: Mr. de la Rue informed me that it was impossible for him to draw up his budget for the fiscal year October 1, 1940–September 30, 1941, unless he knew whether this Government proposed to grant further Export-Import Bank assistance to Haiti. Moreover, he wanted to have the Department’s approval in requesting the support of the Foreign Bondholders Protective Council for a further extension of the moratorium which terminates September 1 of this year.7
I told Mr. de la Rue, therefore, as I had previously, that we had requested that a full and complete study of Haitian finances be made by the Legation in conjunction with his office; that pending the submission of that report and its study by the Department, I did not see how this Government could undertake to decide the questions he was agitating.
Mr. de la Rue at first based his argument for additional credits on the depressive effects which, he says, are apt to follow the cessation of Export-Import expenditures in Haiti. I pointed out that more than half the credit of $5,000,000 is still unspent and only a little more than one year of the three-year program remains to run. His attention was invited to the fact that, whereas average monthly expenditures to date have been $125,000, there remains an average of $175,000 per month for the rest of the period which is substantially that of the fiscal year 1940–41.
Mr. de la Rue then shifted his attack to the uncertainty of coffee prices as a result of the war. In this respect, Haiti’s prospects seem (with our present information) to be little if any worse than are those of other coffee producing countries.
I said to Mr. de la Rue that since the moratorium did not expire until September 1, I saw no reason for not waiting at least until midsummer before taking this up since the negotiations could be consummated within a week if previous negotiations were any example.
[Page 883]Mr. de la Rue stated that while he did not agree with some of my tentative conclusions, he was perfectly willing to wait for a few weeks with regard to the moratorium, as well as with regard to the consideration of Haiti’s general financial picture, although he requested that the Legation be urged to expedite its report. In requesting Mr. Mayer to hasten his report as much as possible consistent with sound study, I think we must realize that we cannot expect to reach conclusions of too categorical a nature until the developments in Europe are better known.